BILL NUMBER: SB 574 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Dunn
FEBRUARY 23, 1999
An act to amend Sections 50780, 50781, 50783, 50784, 50785, and
50786 of the Health and Safety Code, relating to mobilehome parks,
and making an appropriation therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 574, as introduced, Dunn. Mobilehome Park Purchase Fund.
Existing law authorizes the Department of Housing and Community
Development to make loans from the Mobilehome Park Purchase Fund to
mobilehome park residents or resident organizations to finance
conversion of the parks to resident ownership. The Mobilehome Park
Purchase Fund is continuously appropriated to the department for the
purpose of providing these loans and for related administrative
costs.
This bill would authorize those loans to also be made to qualified
nonprofit housing sponsors and local public entities for the
conversion of parks to ownership by those nonprofit sponsors or local
public entities. The bill would make an appropriation by
authorizing the expenditure of money in the Mobilehome Park Purchase
Fund for a new purpose.
Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 50780 of the Health and Safety Code is amended
to read:
50780. (a) The Legislature finds and declares as follows:
(1) That manufactured housing and mobilehome parks provide a
significant source of homeownership for California residents, but
increasing costs of mobilehome park development and construction,
combined with the costs of manufactured housing, the costs of
financing and operating these parks, the low vacancy rates, and the
pressures to convert mobilehome parks to other uses increasingly
render mobilehome park living unaffordable, particularly to those
residents most in need of affordable housing.
(2) That state government can play an important role in addressing
the problems confronted by mobilehome park residents by providing
supplemental financing which that makes
it possible for mobilehome park residents to acquire the mobilehome
parks in which they reside and convert them to resident ownership.
(3) That a significant number of older mobilehome parks exist in
California, the residents of which may collectively lack the
experience or other qualifications necessary to successfully own and
operate their parks; that these parks provide low-cost housing for
their residents that would be difficult to replace if the parks were
converted to other uses; that these parks are more likely than other
parks to be threatened by physical deterioration or conversion to
other uses; and that it is, therefore, appropriate to use the
resources of the fund pursuant to this chapter to transfer these
parks to ownership by qualified nonprofit housing sponsors or by
local public entities for the purpose of preserving them as
affordable housing.
(b) Therefore, it is the intent of the Legislature, in enacting
this chapter, to encourage and facilitate the conversion of
mobilehome parks to resident ownership or ownership by qualified
nonprofit housing sponsors or by local public entities , to
protect low-income mobilehome park residents from both physical and
economic displacement, to obtain a high level of private and other
public financing for mobilehome park conversions, and to help
establish acceptance for resident-owned , nonprofit-owned, and
government-owned mobilehome parks in the private market.
SEC. 2. Section 50781 of the Health and Safety Code is amended to
read:
50781. Unless the context otherwise requires, the following
definitions given in this section shall control construction of this
chapter:
(a) "Affordable" means that, where feasible, low-income residents
should not pay more than 30 percent of their monthly income for
housing costs.
(b) "Conversion costs" includes the cost of acquiring the
mobilehome park, the costs of planning and processing the conversion,
the costs of any needed repairs or rehabilitation, and any
expenditures required by a governmental agency or lender for the
project.
(c) "Department" means the Department of Housing and Community
Development.
(d) "Fund" means the Mobilehome Park Purchase Fund created
pursuant to Section 50782.
(e) "Housing costs" means the total cost of owning, occupying, and
maintaining a mobilehome and a lot or space in a mobilehome park.
The department's regulations shall specify the factors included in
these costs and may, for the purposes of calculating affordability,
establish reasonable allowances.
(f) "Individual interest in a mobilehome park" means any interest
which that is fee ownership or a lesser
interest which that entitles the
holder to occupy a lot or space in a mobilehome park for a period of
not less than either 15 years or the life of the holder. Individual
interests in a mobilehome park include, but are not limited to, the
following:
(1) Ownership of a lot or space in a mobilehome park or
subdivision.
(2) A membership or shares in a stock cooperative, as defined in
Section 11003.2 of the Business and Professions Code, or a limited
equity housing cooperative, as defined in Section 33007.5 of
the Health and Safety Code this code .
(3) Membership in a nonprofit mutual benefit corporation
which that owns, operates, or owns and operates
the mobilehome park.
(g) "Low-income resident" means an individual or household
who that is a lower income household,
as defined in Section 50079.5. However, personal assets shall not be
considered in the calculation of income, except to the extent that
they actually generate income.
(h) "Low-income spaces" means those spaces in a mobilehome park
operated by a resident organization which , a
qualified nonprofit housing sponsor, or a local public entity that
are occupied by low-income residents.
(i) "Mobilehome park" means a mobilehome park, as defined in
Section 18214, or a manufactured home subdivision created by the
conversion to resident ownership of a mobilehome
park, as defined in Section 18214, including a senior park , to
resident ownership or ownership by a qualified nonprofit
housing sponsor or local public entity .
(j) "Program" means the Mobilehome Park Resident Ownership
Program.
(k) "Qualified nonprofit housing sponsor" means a nonprofit
public benefit corporation, as defined in Part 2 (commencing with
Section 5110) of Division 2 of the Corporations Code, or a nonprofit
mutual benefit corporation, as defined in Part 3 (commencing with
Section 7110) of Division 2 of the Corporations Code, that (1) is not
affiliated with or controlled by a for-profit organization or
individual, (2) has extensive experience with the development and
operation of publicly subsidized affordable housing, and (3) the
department determines is qualified by experience and capability to
own and operate a mobilehome park that provides housing affordable to
low-income households.
(l) "Resident organization" means a group of mobilehome park
residents who have formed a nonprofit corporation, cooperative
corporation, or other entity or organization for the purpose of
acquiring the mobilehome park in which they reside and converting the
mobilehome park to resident ownership. The membership of a resident
organization shall include at least two-thirds of the households
residing in the mobilehome park. The two-thirds of households in the
resident organization at the time of funding the park need not be
the same households that were residing in the park when the
application for assistance was submitted to the department. A
household's membership in the resident organization when the
application was submitted to the department shall not be a
requirement for that household to receive a loan or assistance under
this chapter.
(l)
(m) "Resident ownership" means, depending on the context,
either the ownership , by a resident organization
, as defined in this section, of an interest in a
mobilehome park which that entitles the
resident organization to control the operations of the mobilehome
park for a term of no less than 15 years, or the ownership of
individual interests in a mobilehome park, or both.
SEC. 3. Section 50783 of the Health and Safety Code is amended to
read:
50783. (a) The department may make loans from the fund to
resident organizations , qualified nonprofit housing sponsors,
and local public entities for the purpose of financing
mobilehome park conversion costs , as defined in this
chapter and the costs of transferring ownership to
qualified nonprofit housing sponsors or to local public entities
.
(b) Loans provided pursuant to this section shall be for a term of
no more than three years and shall bear interest at a rate of 3
percent per annum.
(c) Loans provided pursuant to this section shall be for the
minimum amount necessary to enable a resident organization or a
qualified nonprofit housing sponsor or a local public entity to
acquire and or convert the mobilehome
park in which its members reside . To the extent
possible, the loan amount shall not exceed 50 percent of the approved
conversion costs. However, the loan amount may be for up to 95
percent of the approved conversion costs attributable to the
low-income households in the park when approved by the department.
(d) The department may grant approval to exceed 50 percent of the
approved conversion costs only where both of the following are
demonstrated:
(1) That the applicant has made an effort to secure additional
funds from other sources and these funds are not available.
(2) That the project would not be feasible, as determined by the
department, without a waiver of the 50 percent financing limitation.
(e) The total secured debt in a superior position to the
department's loan plus the department's loan shall not exceed the
value of the collateral securing the loan.
SEC. 4. Section 50784 of the Health and Safety Code is amended to
read:
50784. (a) The department may make loans from the fund to
low-income residents of mobilehome parks converted to resident
ownership or to ownership by a qualified nonprofit housing
sponsor or a local public entity or to resident organizations
which that have converted or plan to
convert a mobilehome park to resident ownership or to ownership
by a qualified nonprofit housing sponsor or by a local public entity
that has transferred or plans to transfer a mobilehome park to
nonprofit ownership . The purpose of providing loans pursuant
to this section is to reduce the monthly housing costs for low-income
residents to an affordable level.
(b) Loans provided pursuant to this section shall be for a term of
no more than 30 years and shall bear interest at a rate of 3 percent
per annum.
(c) The department may establish flexible repayment terms for
loans provided pursuant to this section if the terms are necessary to
reduce the monthly housing costs for low-income residents to an
affordable level, and do not represent an unacceptable risk to the
security of the fund. Flexible repayment terms may include, but are
not limited to, graduated payment schedules with negative
amortization.
(d) Loans provided to low-income residents pursuant to this
section shall be for the minimum amount necessary to reduce the
borrower's monthly housing costs to an affordable level. All of the
following shall apply to loans to finance individual interests
pursuant to this section:
(1) To the extent possible, loan amounts shall not exceed 50
percent of the acquisition costs of the individual interests in the
mobilehome parks. However, the loan amounts may be for up to 95
percent of the acquisition costs of the individual interests in the
mobilehome parks when approved by the department.
(2) The department may grant approval to exceed 50 percent of the
acquisition costs of the individual interests only where both of the
following are demonstrated:
(A) That the low-income resident has made an effort to secure
additional funding from other sources and these funds are not
available.
(B) That the low-income resident would be unable to purchase an
individual interest without a waiver of the 50 percent financing
limitation.
(3) The total indebtedness upon individual interests may not
exceed 95 percent of the value of the collateral securing the loan.
(e) Loans provided to resident organizations , qualified
nonprofit housing sponsors, or local public entities pursuant
to this section shall be for the minimum amount necessary to reduce
the monthly housing costs of low-income residents to an affordable
level. All of the following shall apply to loans made to resident
organizations , qualified nonprofit housing sponsors, or local
public entities pursuant to this section:
(1) To the extent possible, loan amounts shall not exceed 50
percent of the conversion costs attributable to the low-income
spaces. However, the loan amounts may be for up to 95 percent of the
conversion costs attributable to the low-income spaces when approved
by the department.
(2) The department may grant approval to exceed 50 percent of the
conversion costs attributable to low-income spaces only where both of
the following are demonstrated:
(A) That the applicant has made an effort to secure additional
funds from other sources and these funds are not available.
(B) That the project would not be feasible as determined by the
department without a waiver of the 50 percent financing limitation.
(3) The total secured debt in a superior position to the
department's loan plus the department's loan shall not exceed the
value of the collateral securing the loan.
(f) Funds provided pursuant to this section shall not be used to
assist residents who are not of low income, or to reduce monthly
housing costs for low-income residents to less than 30 percent of
their monthly income.
SEC. 5. Section 50785 of the Health and Safety Code is amended to
read:
50785. (a) In determining the eligibility for and
amount of loans pursuant to Sections 50783 and 50784, the department
shall take into consideration, among other factors, all of the
following:
(a)
(1) The reasonableness of the conversion costs relating to
repairs, rehabilitation, construction, or other costs.
(b)
(2) Any administrative and security factors affecting the
department's program operation and administration.
(c)
(3) Whether or not the projects complement the
implementation of a local housing program to preserve or increase the
supply of housing for persons and families of low or moderate
income.
(d)
(4) Whether or not state funds are utilized in the most
efficient and effective manner. To
(5) In the case of a loan to a qualified nonprofit housing sponsor
or to a local public entity, evidence of resident participation in
the conversion and management of the park, in the form of either
resident participation on the board of directors of the entity that
acquires ownership of the park, or the establishment of, and
consultation with, a permanent resident advisory board.
(b) To the extent consistent with requests for assistance,
the department shall allocate funds available for the purposes of
this chapter throughout the state in accordance with identified
housing needs, including seeking to allocate not less than 20 percent
to rural areas. If the department receives more applications
in a given funding period than it has funds available, the department
shall seek to award funds for resident-owned park purchases in an
amount at least in proportion to the percentage of the requests
received.
SEC. 6. Section 50786 of the Health and Safety Code is amended to
read:
50786. (a) The department shall adopt regulations for the
administration and implementation of this chapter.
(b) The department shall obtain the best available security for
loans made pursuant to this chapter. The security may include a
note, deed of trust, assignment of lease, or other form of security
on real or personal property which the department determines is
adequate to protect the interests of the state. To the extent
applicable, these documents and any regulatory provisions shall be
recorded or referenced in a recorded document in the office of the
county recorder of the county in which the mobilehome park is
located.
(c) The degree of continuing regulatory control with respect to
park operations and resident loans exercised by the department in
making loans pursuant to this chapter shall be commensurate with the
level of financial assistance provided and in all cases shall be
adequate to protect the state's security interest and ensure the
accomplishment of the purposes of the program authorized by this
chapter. The regulatory requirements shall be set forth in a
regulatory agreement, deed of trust, or other lien, and any violation
of these requirements shall be considered a violation of a security
document. Where loans are made to a qualifying nonprofit
housing sponsor or local public entity, a regulatory agreement shall
be recorded against the mobilehome park. This regulatory agreement
shall contain provisions limiting occupancy, rents, and park
operation for the original loan term. The department may release
individual spaces from the regulatory agreement only if they are
purchased by low-income residents who occupy them.
(d) Before providing financing pursuant to this chapter, the
department shall require provision of, and approve, at least all of
the following:
(1) Verification that at least two-thirds of the households
residing in the mobilehome park support the plans for acquisition and
conversion of the park.
(2) Verification that either no park residents shall be
involuntarily displaced as a result of the park conversion or the
impacts of the displacement shall be mitigated as required under
state and local law. For purposes of this requirement, compliance
with Section 66427.5 of the Government Code shall be conclusively
presumed to have mitigated economic displacement.
(3) Verification that the conversion is consistent with local
zoning and land use requirements, other applicable state and local
laws, and regulations and ordinances.
(4) Projected costs and sources of funds for all conversion
activities.
(5) Projected operating budget for the park during and after the
conversion.
(6) A management plan for the conversion and operation of the
park.
(7) If necessary, a relocation plan for residents not
participating which that is in
compliance with Chapter 16 (commencing with Section 7260) of Division
7 of Title 1 of the Government Code.
(e) The department shall, to the greatest extent feasible, do both
of the following:
(1) Require participation by cities and counties in loan
applications submitted pursuant to this chapter.
(2) Contract with private lenders or units of local
government local public entities to provide
program administration and to service loans made pursuant to this
chapter.